ON Semiconductor Corporation (ON)

Payables turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	4,369,500	4,376,400	4,360,600	4,307,500	4,249,000	4,179,800	4,066,800	4,048,700	4,025,500	3,960,300	3,815,100	3,624,500	3,539,200	3,506,600	3,537,100	3,546,600	3,544,300	3,561,600	3,600,100	3,652,300
Payables	US$ in thousands	725,600	911,300	907,500	976,200	852,100	791,700	793,800	725,300	635,100	599,300	610,200	605,000	572,900	534,200	522,900	503,900	543,600	534,100	542,900	583,300
Payables turnover		6.02	4.80	4.81	4.41	4.99	5.28	5.12	5.58	6.34	6.61	6.25	5.99	6.18	6.56	6.76	7.04	6.52	6.67	6.63	6.26

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $4,369,500K ÷ $725,600K
= 6.02

The payables turnover ratio measures how efficiently a company is managing its accounts payable by evaluating how many times a company pays off its suppliers in a given period. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently or making quicker payments.

Based on the data provided for ON Semiconductor Corp., we observe fluctuations in the payables turnover ratio over the past eight quarters. The payables turnover ratios ranged from 4.41 to 6.02 during this period.

In Q4 2023, the payables turnover ratio was 6.02, reflecting an increase in the efficiency of managing accounts payable compared to the previous quarter. This indicates that ON Semiconductor Corp. paid off its suppliers over six times during the quarter.

Comparing Q4 2023 to the same quarter in the previous year (Q4 2022), the payables turnover ratio increased from 4.99 to 6.02, suggesting an improvement in managing supplier payments.

Although the payables turnover ratio fluctuated over the quarters, the company generally maintained a healthy turnover ratio above 4, indicating efficient management of accounts payable and timely payments to suppliers. However, sustained monitoring and analysis of this ratio are essential to assess the company's liquidity, cash flow management, and relationships with suppliers effectively.